Economic Questions And Considerations Of GMO's

Modern biotechnology has been used extensively to genetically modify living organisms for the perceived purposes of increasing overall yield in plants and other areas. Researchers are divided on whether genetic modified organisms are economically viable. The economic viability of GMOs has been hampered by the numerous restrictions on them. Such restrictions heighten the overall cost of business, making GMOs unfeasible from the cost-of-business angle. However, proponents of GMOs argue that these organisms are generally feasible because of the fact that they are drought resistant, support herbicide use, and have higher chances of generating high yields. On this foundation, this paper addresses the cost benefits and drawbacks of using GMOs. In addition, a comprehensive comparison of expenditure on foods without genetically modified organisms and the discussed cost benefits and drawbacks is conducted. The overall objective is to establish the economic feasibility or questions and considerations of GMOs.

Cost Advantages and Disadvantages of using GMOs

Various arguments have been advanced over the efficiency of GMOs in relation to the environment. However, there is a minimal amount of research on the cost specifics of using GM products. For instance, the cost incurred or avoided by the farmer as a result of using GM crops, the costs faced or avoided by consumers because of using GM products, and many others are areas have been given superficial analyses. This section addresses this issue.

Cost advantages

Perhaps the strongest line of argument adopted by proponents of GMOs is that they minimize overall cost of production. African farmers need to adopt GMOs because they lower costs of inputs like machinery, chemical pesticides, and fuel. The gene alteration of GM crops ensures that they use weeds and other unwanted organisms on the farm to thrive. In addition, the change in gene orientation results in stronger gene alignment; which provides them with the ability to withstand tough conditions on the farm. It results in lower application of chemical pesticides and machinery in the mode of weeding. The outcome is that costs of production are reduced for farmers. The stifling of GMO use in Europe is as a result of the region having fewer farmers who still enjoy high yields without the new biotechnology; as opposed to GMOs being harmful. He compares the situation with Africa, where most of the population relies on farming, and suggests that the reduced production costs of this technology will be a consummate fit for the continent.

Looking at the case from the production angle, GMO use triggers high yields due to its reliable pest control mechanism. Notably, farmers often incur tremendous losses because of their ineffective pest control approaches. More often than not, pests become resistant to pesticides, resulting in the need to continuously use newer or modified pesticides in order to overcome their threat. The consistent use of newer pesticides eats into farmers’ pockets, triggering high farming-related costs.

Further, use of a range of chemical pesticides reduces productivity of the land, implying that farmers have to invest huge sums into production (say, a high amount of seeds and fertilizer is needed) to get considerable returns. The implication is that higher costs are incurred. The use of GM crops, on the other hand, minimizes these costs because gene modification of plants or seeds allows them to not only resist pests, but use them as springboards for better performance. As such, the minimization of input costs and provision of a reliable and effective pest control mechanism generates cost advantages for farmers.

A projection of the cost benefits of GMOs is that they increase per capita income by creating employment opportunities in less developed regions. Poor households in rural India have significantly benefited from Bt cotton in such a way that it has created employment opportunities for them. Poor households are often plagued by the high cost of living because there is insufficient income for breadwinners. In addition, the number of dependents is painfully high, leading to poor living conditions.

Basic needs like food, shelter, and health are difficult to come by, leading to the emergence of various government and private initiatives to help these groups of people. However, the presence of Bt cotton, which is a genetically modified crop, gives members of the mentioned households a source of income, leading to the reduction in poverty and, by extension, a reduction in the need for medical aid. Bt cotton has been proven to produce 82% higher income than conventional cotton for poor households in India. This improves their wellbeing and the economy of the country as a whole. In addition, most of the gains of Bt cotton in countries growing them go to households below the poverty line. By reducing the cost of living, the cost advantage of GM products can be said to be high. It; therefore, could be said that GMOs have had a cost advantage as far as poverty reduction is concerned.

Quite notably, benefits of GM crops extend to consumers. More than 70% of the incomes from GM crops are directed to farmers. Conjoining this with the fact that the cost of production is lower because of the applied technologies and the gene alignment of crops, it emerges that the cost of food will be low; based on the supply and demand rule. As a result, consumers benefit from the low cost of GM-related food products and other agricultural products supported by biotechnology. Health benefits for consumers can also be looked at as cost advantages, given that less medication will be needed to treat deficiencies in the body. For instance, Golden Rice, which was one of the earliest GM crops, has been proven to reduce health complications associated with vitamin A deficiencies by more than 60%. It implies that consumers can avoid costs related with treating illnesses that emerge from the lack of vitamin A in the body system.

Health benefits are also enjoyed by farmers, who can avoid pesticide-related infections due to the fact that GM crops require minimal application of chemical pesticides. Cost advantages are that there is minimal expenditure in the treatment of respiratory and other infections. A further cost advantage to farmers and companies is that there are high distribution benefits with regard to GM products. Biotech technologies increase benefits to seed companies that patent their products. Additionally, farmers that have shares in corporations enjoy higher share returns and benefits because of the fact that their produce is distributed to a larger consumer base. Overall, GMOs have high cost advantages for all stakeholders, as epitomized by the discussed factors.

Cost Disadvantages

It is within the public domain that a huge number of researchers and consumers are against GM products due to various reasons. While these reasons vary in scope and nature, they can be quantified as cost disadvantages and overall economic drawbacks to society. The first disadvantage of GMOs is that their genetic engineering process creates an unstable conjoint of plant, bacteria, animal, or viral genes that are not naturally-occurring. As a result, investment in these unstable products is a high financial risk, given that genes in plants or other products may be incompatible with particular environments, leading to immense losses. GMOtrack acknowledge the existence of this problem, and propose the use of sample-centered testing strategies to mitigate the challenge of routine laboratory GMO tracking. The aim would be to reduce the instability among genetically altered organisms.

The genetically modified process of nurturing plants and processing food contributes to the DNA degradation of plants; which makes them highly sensitive to particular environments. This degree of sensitivity and incompatibility is a high risk factor for financial losses, especially for parties that choose to invest heavily in GMOs. Notably, sensitivity and incompatibility emerge from the fact that during gene fragmentation, the behavior of DNA is highly unpredictable. This would mean that the results from engineering processes may be contrary to expectations, leading to the aforementioned losses.

In addition, most GMO products are unlabeled. Developed countries have been insistent on labeling GMO products to notify the public of the amount of genetically engineered material being consumed. The EU regulations require that food products and organisms with as low as 0.9% of genetically modified material are subjected to stiff regulations and high scruting. In Germany, there are projected efforts to separate GMOs and non-GMOs, creating battle of sustainability between respective companies in the German market. In the US, consumer groups and lawmakers are strongly pushing for compulsory labeling of GMO products. However, biotech companies have been sluggish in their labeling practices; a feat that culminates in the stiff regulations against GMOs.

From these regulations, it is evident that unions (such as the EU) and governments of developed countries are concerned about the material consumed by the public. This would mean that there are potential health ramifications for consuming or using GMO products. Health side effects result in high economic disadvantages to individuals and countries. For instance, there would be high medical costs at individual level in mitigating such effects. Further, a high number of ill individuals deprive countries of working citizens, leading to a limit to economic growth.

Genetically modified foods are unpalatable in various parts of the world because of their economic and cultural effects. He suggests that while benefits to farmers may exist, the average consumer suffers because of the high cost of these products. Developing countries, for instance, lack regulations on GMOs, which paves way for the exploitation of poor households in these areas. Moreover, the fact that there is an increasing amount of evidence to suggest that GMOs are punctuated with health complications and the violation of consumers’ and farmers’ rights suggests that they harm every economic aspect of the mentioned parties. The increase in health intricacies, as has been previously highlighted, results in extra expenses or costs for the aggrieved parties. An equally important factor is that cultural issues affect farmers that opt to participate in the GMO business. In areas where culture plays a huge part in the day to day lives of human beings, farmers that plant genetically modified crops incur massive losses because consumers avoid these products as stipulated by their cultures.

It is important to note that countries with rigid cultural systems are less developed. In less developed countries, there are no restrictions on GMO products. Additionally, farmers in these countries are encouraged to use GMO products, as evidenced by Paarlberg’s proposal. It results in a case where multitudes of farmers opt to use GM products because of the promise of higher returns and overall high performance. The adoption of these products clashes with cultural norms and beliefs, leading to a degree of interest differences between farmers and consumers. A number of cultures discourage the consumption of genetically modified foods or the overall interaction with genetically modified organisms due to the belief that they go against the natural order of things.

The farmer, being a supplier, will therefore be forced to undergo losses because his or her product will not have consumers. In the US, consumers are generally against GMOs because of their beliefs in natural foods. Despite the lack of regulations on GMOs by the federal government, states are taking it upon themselves to initiate regulations on GMOs in line with preferences of their states. On the basis of these propositions, it emerges that both consumers and farmers face hefty losses because of their colliding interests.

A further counter-argument to the assertion that genetically modified products are pest resistant and require low herbicide application is presented in the form of destruction of soil productivity. As much as proponents of GMOs suggest that the products require low application of chemical pesticides, the fact is that a given amount of pest control applicants is used. The use of a single pest control mechanism, as stipulated by the production procedure of GMOs, triggers negative effects on soil productivity.

Minimization of soil productivity, as has been initially noted, forces farmers to make bigger investments in the production process in order to increase returns. In addition, environmental degradation, which is one of the effects of continual use of the same pest control mechanism, is a costly effect; as highlighted by the numerous documentations on environmental degradation. The numerous promises of higher nutrition, drought resistance, consumer benefit, and increased yield, among others, have yet to be fully realized by the larger population. Negative ramifications, on the other hand, have been extensively felt. The implication would be that cost disadvantages of GMOs are just as high. A comparison between the benefits and disadvantages of GMOs from a cost perspective would; therefore, suggest that the new biotechnology has failed to live up to its billing. The current regulations on genetically modified products in developed countries as well as the increasing consumer avoidance of the products reinforce the assertion that the products have had bigger cost disadvantages than advantages.

Comparison of Expenditure on Foods without GMOs

According to a research conducted by Mellman Group and consumer reports, 92% of Americans prefer the labeling of GMOs. It has been already mentioned that most GMO companies choose not to label their products for the perceived reason of increasing returns. An interesting report suggests that more than 70% of Americans do not want GMOs in their food. However, a test of the usual foods consumed by the public suggests that more than 80% of all packaged food products; including those labeled natural, have GMOs. Only those labeled “non-GMO” were free of the genetically modified material. Specifically, GMOs are present in breakfast cereals, soy infant formulas, chips, and many other products that are popular among Americans. It implies that more than 80% of Americans consume GMOs without knowing it. Various critics of GMOs suggest that numerous food crops, including most of the natural ones, have been genetically engineered; making it difficult to distinguish between food products without GMO and those with these organisms.

Working with the report findings that only non-GMO labeled foods were free of genetically engineered organisms, it suffices to state that the consumption rate of food products without GMOs is less than 50%. From the retail perspective, the consistent infiltration of foods and beverages by GMOs suggests that by 2017, retail sales for non-GMO products will stand at a meager 30%. Currently, retail sales are a little over 40%. It means that the expenditure by Americans on GMO products is low and on a decreasing curve. Interestingly, 60% of consumers are reported to harbor the belief that foods labeled “natural” are free of genetically modified organisms Therefore, their bids to avoid GMO foods by purchasing natural ones results in an ironical increase in GMO purchases. The result is that expenditure on genetically modified foods is higher than that on foods without genetic modifications. Such products as Chobani Greek Yogurt and other types of yogurt, Kashi crunchy Granola, Starbucks’ milk, and many other famous products have genetically modified organisms; which substantiates the previous assertion that expenditure on non-GMO products is lower than that on GMO products.

On the basis of the analyses on the benefits and drawbacks of GMOs, it was established that cost disadvantages were higher than benefits. Consumers and farmers were highly likely to suffer losses than come by profits and gains. In addition, there were numerous social, cultural, and environmental ramifications of using genetically modified products. Specifically, their continuous use is believed to be a contributing factor to environmental degradation and pollution. However, a comparison between expenditure on GMOs and non-GMOs reveals that despite the overwhelming disapproval of the latter on the market, retail sales indicate that consumers purchase more GMOs. It suggests that information plays a defining role in determining consumption of products by the public. Currently, consumers are largely unaware of what foods contain GMOs and which ones are free of them. In addition, biotech companies have failed to provide substantial information with regards to the safety of using or consuming GMO related products. There is insufficient research to prove to the public that GMOs will not have any side effects on consumers.

Equally important is the fact that the federal government has been reluctant to issue regulations on genetically modified products. A common line of criticism is that if the public is made to be aware of frozen foods and others, it should be given sufficient information about genetically modified foods. The increase in infiltration of GMOs in the daily foods of Americans is as a result of the country growing GM crops in huge quantities. For instance, Soy has a GMO content of 93%; corn has 86%; Canola has 90%; and cotton has 93%. The result is that products (food and otherwise) will be rich in genetically modified material. The debate on whether GMOs are safe rages on, with companies producing these products arguing that genetic engineering is a mere extension of breeding that was done traditionally. The federal government seems to be on board with these companies, given that it has not mandated that GM products be tested for safety before being released into the market. Other countries, however, have mandated the testing and regulation of these products, which beats the logic of why the federal government has not done so.

It clearly emerges that there is a huge chunk of information being withheld from the American public. For one, seed manufacturers and food companies (like Nestle USA, General Mills, PepsiCo, and others) of genetically engineered products have fiercely opposed any attempts to have them label their products. If they were entirely safe, why would they resist labeling? In addition, their argument that stamping such foods with labels to show they are genetically modified will make them inferior to other products betrays the suspicion that the products could be actually inferior or more dangerous to consumers. The fact that these products have had higher disadvantages and are being campaigned against by the public suggests that they are unwanted. As such, there should be not attempt to force consumers into purchasing them. Currently, retail rates indicate that consumers are being forced into consuming GMOs, given that more than 60% of them do not know that most of the “natural” products are full of GMOs.

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